Arizona gas tax increase proposed to help fund road improvements

Posted at 5:55 PM, Jun 20, 2018
and last updated 2018-06-21 08:36:04-04

It's a game of numbers and the debate has long centered on whether you'd be willing to pay more at the pump to help foot the bill for improvements to our roads and highways. 

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Raising the state gas tax has long been controversial. Currently, the Arizona state gas tax sits at 18 cents per gallon. According to the Tax Foundation, Arizona has the 6th lowest state gas tax in the nation. Proponents of raising the gas tax say it would help infuse a lot of cash into a long list of needed road and highway projects.  

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"That's where we are today, we're right on the cusp of not being able to maintain what we have," said Eric Anderson, the executive director for the Maricopa Association of Governments, which plans our highway systems in metro Phoenix.  

Anderson is a proponent for raising the gas tax at least 10 cents per gallon, bringing us closer to the national average. Arizona has not raised the gas tax since 1991, with the latest effort stalling out in the state legislature in 2017.

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"It's not a big hit at all," Anderson said. "The returns in spending that money, maintaining our road system and doing necessary expansion is so important for the state's economic well-being."

Anderson notes increased construction costs and more fuel efficient vehicles mean the purchasing power for money raised by the gas tax isn't what it was 27 years ago. 

According to Anderson, each penny of the gas tax raises roughly $35 Million annually. Numbers show the gas tax, which is one of several streams of revenue, brought in $504 Million in fiscal year 2017 to the state's Highway User Revenue Fund. That money is then distributed to a variety of places, including to ADOT, which maintains the state's highway system.

According to ADOT's long-range transportation plan for 2040, they project a $30.5 Billion funding shortfall.

"It's sort of like having a leak in your roof," Anderson said. "If you don't take care of it, if you don't do that preventative maintenance on your roof, it will collapse at some point. We've seen that in sections of I-40 across northern Arizona that the pavement is just disintegrating in places."

While raising the gas tax would bring in more cash for road repair and maintenance, some argue that's not the best way to raise money. 

"I fundamentally reject the idea that we should raise something simply because it hasn't been raised since the early 90s," said State Representative Ben Toma (R-22). "By that logic we can raise all kinds of taxes all the time."

Rep. Toma noted the shift to alternative fuel vehicles as a reason to not focus on gas as the primary way to increase revenue for roads. 

"You have all these different types of energy sources, or vehicles based on these energy sources, and they're not going to be based on the gas tax," Rep. Toma said. "If your plan is to figure out how to fund infrastructure in the long-term, how to fund infrastructure investments, then basing it on the gas tax is the wrong way to start."

In a hypothetical situation, raising the gas tax 10 cents per gallon would cost a person roughly $8/month if they filled up 20 gallons per week. Rep. Toma, however, says there are additional hidden costs as businesses might pass the burden off to consumers. 

"Everything from bananas to Amazon deliveries to virtually everything else that you do is affected by increased cost," he said. 

According to the National Conference of State Legislatures, in 2017 seven states passed legislation to raise the gas tax.

In order to find additional revenue for roads, Rep. Toma says it will take a lot of discussion. 

"I do think we need to look at what that might look like in the future and potentially look at other revenue sources to get to that same place, but I don't think the gas tax is the place to do it," Rep. Toma said. 

Meanwhile, Anderson told ABC15 raising the gas tax is a simple solution that would have long-lasting effects across our state.  

"Your roads can go from ok, to not very good, to bad condition over maybe a 10-year period," Anderson said. "Then you're talking about it's a lot more expensive to repair the road at that point than it is just to maintain it."

While not a tax increase, the state legislature did pass a bill last session to increase vehicle registration fees, expected to bring in roughly $140 Million to the Highway User Revenue Fund. That should free up some money for road repair.